In part one of this three part series covering the latest in revenue recognition, Brad Hale, Tampa Bay Managing Director, gives the background on the different accounting rules throughout the world, specifically focusing on one of the IASB and FASB’s first projects - creating a set of universal standards for revenue recognition.
Brad discusses why the IASB and FASB set out to make these changes and covers some frequently asked questions about the new rules and what they entail.
- When will the new standards take effect?
o For public companies, the standards will kick in during the fiscal year beginning after Dec. 15, 2017.
o Private companies will be required to implement the standards exactly one year later, beginning the fiscal year after Dec. 15, 2018.
- How will businesses be affected?
o Businesses will find they have to disclose more. Under the new standards, there will likely be several pages of disclosure, most of which will discuss the reasoning that led to management’s decisions and conclusions about how to recognize revenue.
- What should businesses do now to prepare?
o Businesses should continue to monitor the amendments being made by the FASB, as there are still several amendments that need to get finalized. Businesses should also make every effort to get up to speed on the standards so they are ready when the time comes for implementation.
Stay tuned for parts two and three, which will discuss the challenges businesses will face during and after implementation and how they should prepare ahead of the transition. To read the full article, click here. For more information on how to adopt the new revenue recognition standard, click here or contact Brad at firstname.lastname@example.org or 727.572.1400.